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To get around the Philippine land ownership rules for example, non-
citizens may arrange for a Filipino citizen to purchase land and register
the land title to the Filipino citizenʼs name, but with the agreement that
the whole right to the land belongs to the foreigner. In this case, the
Filipino citizen is the “proxy,” thus the “dummy arrangement.” Another
common approach, is to create a corporation. The problem with using
a corporation to avoid the land restrictions rules, is the 40-60 ratio
that applies (40% foreign ownership, 60% Filipino ownership).
Therefore a variety of side agreements are used to keep control of the
corporation in the hands of the foreigner.
This is only a limited overview of the broad reaching Anti- Dummy Law.
If you are setting up a business or acquiring real property in the
Philippines, you need to be aware of how the anti-dummy rules may be
applied to the way the transaction is being structured. If you donʼt
want your dream business or property investment in the Philippines to
turn into a legal nightmare.